EV Tax Credits to Spur More Vehicle Sales Are Entering a Critical Phase
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EV Tax Credits to Spur More Vehicle Sales Are Entering a Critical Phase

Auto industry pushes Treasury Department to write rules that clearly spell out how electric vehicles can fully qualify, with as much flexibility as a new law allows

Wed, Sep 28, 2022 8:51amGrey Clock 3 min

The US government is pressing to complete new rules on tax breaks for electric-vehicle purchases by an end-of-year deadline as auto companies seek guidelines that help qualify as many vehicles as possible.

The Treasury Department is leading the effort after the August signing of a law that extended an existing $7,500 tax credit through 2032. The EV plan, included in Democrats’ climate, health and tax-policy package known as the Inflation Reduction Act, included new requirements for U.S. battery sourcing that auto makers have warned will make it difficult for models available today to be eligible.

The changes to the EV tax credits come amid sharp price increases for new vehicles. New-vehicle prices were up 10.1% in August from a year earlier, according to the Labor Department, outpacing the overall annual inflation rate of 8.3%. The average electric-vehicle price is more than $60,000.

EV sales have tripled in the past two years but still account for just 6% of U.S. vehicle sales. Auto companies are pushing to develop and sell more models with goals to greatly increase the percentage of EVs manufactured and sold.

The tax credits are intended to spur electric-vehicle sales and encourage the auto industry to shore up domestic supply chains for materials needed to manufacture EVs. The Biden administration and Democrats see speeding up the pace of U.S.-based production and purchases of electric vehicles as important parts of their broader push to lower greenhouse-gas emissions and address climate change.

The Treasury Department, in its regulatory guidance for the credits, could help make the new requirements easier for auto makers to meet, industry and advocacy groups said. Issues the groups would like to see addressed include how the government calculates whether the sourcing requirements have been met and how auto makers will certify they are in compliance. By law, Treasury must issue guidance for the new requirements by Dec. 31.

Starting in 2023, the law imposes two requirements for an electric vehicle to be eligible for the full tax credit. First, at least 40% of the value of crucial battery minerals such as lithium and nickel must have been extracted or processed in the U.S. or in countries with which the U.S. has a free-trade agreement, or have been recycled in North America. Second, at least 50% of the value of the vehicle’s battery components must have been manufactured or assembled in North America. The percentage thresholds increase in subsequent years.

Dan Bowerson, a senior director at the Alliance for Automotive Innovation, a trade group whose members include several auto makers, said Treasury should issue streamlined guidelines so that auto makers can easily understand the rules as they plan how to meet the requirements.

“We’re going to be pushing for the guidance to be as clear as possible, so that everyone is looking at the same thing,” Mr. Bowerson said. “We don’t want one manufacturer to say, ‘We’re taking the percentage value of the battery components to mean this,’ while the others take it to mean that.”

Tom West, deputy assistant secretary for tax policy at the Treasury Department, said the agency is trying to determine what discretion it has in writing the rules. It is collaborating with other agencies, such as the Energy Department and the Environmental Protection Agency, to understand issues that fall outside of the department’s expertise. He said Treasury is also working to define what constitutes a free-trade agreement for the purposes of tax issues, given the critical-minerals requirements.

“It is a significant challenge, but it is a challenge we are eager to take on because this legislation is something that we’ve been fighting to get for a generation,” Mr. West said about writing the rules.

Auto manufacturers likely will find it challenging to comply with the new rules immediately. The industry has historically been reliant on China and other countries for EV batteries and the processing of minerals that go into them.

Industry and advocacy groups said Treasury should also issue guidance on requirements that go into effect in 2024 and 2025 that make EVs ineligible for the tax credit if they have batteries or critical minerals in batteries that are sourced from a so-called foreign entity of concern, such as China.

“That’s an element of this that needs clarification for sure,” said Genevieve Cullen, president at the trade group Electric Drive Transportation Association. She said members of her group have questions on how the rules would apply when companies are based outside of countries such as China, but have subsidiaries with related EV operations there.

The Alliance for Automotive Innovation has said it would take several years for any EVs now available for purchase in the U.S. to qualify for the full credit, given the new sourcing requirements.

Abigail Wulf, of the Washington-based advocacy group Securing America’s Future Energy, said another question is how Treasury will set calculations for the critical-minerals requirement, because the value of a mineral changes from when it is mined compared with when it is processed. She also said industry likely could meet the battery-component requirements more quickly if the guidance emphasized the manufacturing or assembly location for battery packs—rather than the location of production of battery cells—because many auto makers were just now beginning to increase their domestic facilities for the latter.


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35 North Street Windsor

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Should AI Have Access to Your Medical Records? What if It Can Save Many Lives?

We asked readers: Is it worth giving up some potential privacy if the public benefit could be great? Here’s what they said.

Tue, May 28, 2024 4 min

We’re constantly told that one of the potentially biggest benefits of artificial intelligence is in the area of health. By collecting large amounts of data, AI can create all sorts of drugs for diseases that have been resistant to treatment.

But the price of that could be that we have to share more of our medical information. After all, researchers can’t collect large amounts of data if people aren’t willing to part with that data.

We wanted to see where our readers stand on the balance of privacy versus public-health gains as part of our series on ethical dilemmas created by the advent of AI.

Here are the questions we posed…

AI may be able to discover new medical treatments if it can scan large volumes of health records. Should our personal health records be made available for this purpose, if it has the potential to improve or save millions of lives? How would we guard privacy in that case?

…and some of the answers we received. undefined

Rely on nonpartisan overseers

While my own recent experience with a data breach highlights the importance of robust data security, I recognise the potential for AI to revolutionise healthcare. To ensure privacy, I would be more comfortable if an independent, nonpartisan body—overseen by medical professionals, data-security experts, and citizen representatives—managed a secure database.

Anonymity cuts both ways

Yes. Simply sanitise the health records of any identifying information, which is quite doable. Although there is an argument to be made that AI may discover something that an individual needs or wants to know.

Executive-level oversight

I think we can make AI scanning of health records available with strict privacy controls. Create an AI-CEO position at medical facilities with extreme vetting of that individual before hiring them.

Well worth it

This actually sounds like a very GOOD use of AI. There are several methods for anonymising data which would allow for studies over massive cross-sections of the population without compromising individuals’ privacy. The AI would just be doing the same things meta-studies do now, only faster and maybe better.

Human touch

My concern is that the next generations of doctors will rely more heavily, maybe exclusively, on AI and lose the ability or even the desire to respect the art of medicine which demands one-on-one interaction with a patient for discussion and examination (already a dying skill).


People should be able to sign over rights to their complete “anonymised” health record upon death just as they can sign over rights to their organs. Waiting for death for such access does temporarily slow down the pace of such research, but ultimately will make the research better. Data sets will be more complete, too. Before signing over such rights, however, a person would have to be fully informed on how their relatives’ privacy may also be affected.

Pay me or make it free for all

As long as this is open-source and free, they can use my records. I have a problem with people using my data to make a profit without compensation.

Privacy above all

As a free society, we value freedoms and privacy, often over greater utilitarian benefits that could come. AI does not get any greater right to infringe on that liberty than anything else does.

Opt-in only

You should be able to opt in and choose a plan that protects your privacy.

Privacy doesn’t exist anyway

If it is decided to extend human lives indefinitely, then by all means, scan all health records. As for privacy, there is no such thing. All databases, once established, will eventually, if not immediately, be accessed or hacked by both the good and bad guys.

The data’s already out there

I think it should be made available. We already sign our rights for information over to large insurance companies. Making health records in the aggregate available for helping AI spot potential ways to improve medical care makes sense to me.

Overarching benefit

Of course they should be made available. Privacy is no serious concern when the benefits are so huge for so many.

Compensation for breakthroughs

We should be given the choice to release our records and compensated if our particular genome creates a pathway to treatment and medications.

Too risky

I like the idea of improving healthcare by accessing health records. However, as great as that potential is, the risks outweigh it. Access to the information would not be controlled. Too many would see personal opportunity in it for personal gain.

Nothing personal

The personal info should never be available to anyone who is not specifically authorised by the patient to have it. Medical information can be used to deny people employment or licenses!

No guarantee, but go ahead

This should be allowed on an anonymous basis, without question. But how to provide that anonymity?

Anonymously isolating the information is probably easy, but that information probably contains enough information to identify you if someone had access to the data and was strongly motivated. So the answer lies in restricting access to the raw data to trusted individuals.

Take my records, please

As a person with multiple medical conditions taking 28 medications a day, I highly endorse the use of my records. It is an area where I have found AI particularly valuable. With no medical educational background, I find it very helpful when AI describes in layman’s terms both my conditions and medications. In one instance, while interpreting a CT scan, AI noted a growth on my kidney that looked suspiciously like cancer and had not been disclosed to me by any of the four doctors examining the chart.


This stylish family home combines a classic palette and finishes with a flexible floorplan

35 North Street Windsor

Just 55 minutes from Sydney, make this your creative getaway located in the majestic Hawkesbury region.

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